It's extremely difficult to come up with a great business
idea and then gather the gumption to actually start the business.
But now you have to deal with all the tiny details that make up a
real, legitimate business. Legal red tape, marketing, planning,
money management-your new and overwhelming to-do list spans pages.
That's why we've decided to help you by putting it all on
one simple checklist. Below, we go into detail on the different
areas of the checklist. After you've checked out all this
information, download our free Homebased Startup Checklist to get started. (The
checklist is an Adobe Acrobat PDF file; download a free reader
here.) You'll be up and running in no
time.

Planning Your Business

Business Plan. One of the most important stacks of paper
you'll ever come across in your business is your business plan.
Even if you're just a one-person operation who wants to make a
living rather than millions of dollars, you still need to create a
business plan. You'll have your market, competition, plan for
making dough, financials-all in one tidy spot to show investors,
suppliers, employees, your proud grandma and, most important,
yourself. It'll keep your eyes on that prize, whatever it may
be.

Marketing Plan. You thought you'd planned it all out
with your business plan? Not quite. Marketing is such an important
part of your business, it gets a plan all its own. Your marketing
plan focuses on your customers-how you'll find them and how
you'll make them your own. It thoroughly and completely
outlines your product, target market, competition, objectives and
budget, as well as how you'll track the effectiveness of your
campaigns.

Financial Plan. This isn't a plan per se, like the
ones above, but more an assessment of your financial wherewithal.
First, make an inventory of your present assets-savings accounts,
real estate equity, retirement accounts, etc. This helps you
determine: a) if you want to sell anything or use the accounts for
funding; or b) what you can use as collateral for a loan. Next,
determine your startup costs-all the money you need to get your
business off the ground and floating for at least six months while
you gather customers and start bringing in cash. This includes
paying yourself a salary, because, unfortunately, you can't
live on air during the startup phase.

The Legal Details

Business name. When you've decided on your business
name, you'll want to make it legal by filing a DBA ("doing
business as"). Most areas require you to register with the
county and run a notice in your local newspaper. Protecting your
new name with a trademark is also a great idea to ensure both that
no one filches your golden name and that you're not unknowingly
using someone else's. Your trademark search helps you determine
the latter-your local Yellow Pages and chamber of commerce are easy
places to start looking. Visit the U.S. Patent and Trademark
Office's Web site to read their trademark FAQ.

Zoning. Want to start a homebased business? You'd
better make sure it's actually legal in your neck of the woods.
Check with your city or county, but as many homebased experts
suggest, call anonymously, because if it isn't legal, you may
find an official coming around for a peek at your office. If it is
legal, you still need to find out about any restrictions-like
signage or parking-before you make enemies of your neighbors.

Licensing. You may need to get several different types
of licensing. The typical city permit is the first most people
think of. But your county may also require a business license; the
fire department may need to inspect your office; you may need a
sign permit if you're advertising your at-home business.
Depending on your type of business-say, a hair salon or insurance
agency-you may also need to be professionally licensed by the
state. Cover your bases by checking with all your local agencies:
city, county and state.

Tax ID/sales tax. Sales tax laws vary depending on
locale, but one thing is certain: If you don't apply for a
"seller's permit," you'll be in hot water. Check
with your city, county and state offices to ensure you're
collecting the right amount of sales tax from your customers-and
that you're paying the right amount to Uncle Sam. You also need
to obtain a tax ID for your own business from the IRS. Check with
your accountant to iron out the details.

Insurance. You've built it, and they will definitely
come. No, we're not talking about customers. We're talking
disasters, from employee theft to a plane crashing into your home
office. The best way to protect yourself is to insure yourself to
the hilt-and your homeowner's policy more likely doesn't
give you the protection you think it does. Check out the resources
in our "Legal Resources" box below, then schedule a visit
with an insurance agent, so you can protect your valuable business
from top to bottom.

Business structure. This is where you decide which
acronym or abbreviation you're going to paste onto the back of
your business name. Really, it's much more involved than that,
which is why you should go over any decisions with an attorney.
Whether you incorporate or stay a sole proprietor, go for an LLP or
LLC, this decision affects your personal liability and many tax
issues.

Get an attorney. According to our former Startup Basics
Expert Keith Lowe, an attorney is one-third of the professional
triptych that'll help your business become a success. (A banker
and accountant are the other two-thirds, by the way.) Don't be
intimidated when you go on your business-attorney hunt; even if
they have 10 degrees framed on the wall, they're still working
for you. Ask lots of questions and don't settle for less than
the best. Like your insurance agent, a good attorney will be worth
the cash outlay, because he or she protects your business.

Taking Care of Your Finances

Business bank account. Yes, it's time to go beyond
free banking. You need to immediately get a business bank account
to keep your finances in check. "A separate bank account
facilitates record keeping, and, for some really small homebased
businesses, it may be virtually all the bookkeeping records they
need," says E. James Burton, dean of the Jennings A. Jones
College of Business at Middle Tennessee State University, and
co-author of Accounting and Finance for Your Small Business.
"It also simplifies tax reporting and permits an easier,
faster look at the health of the business-that is, problems in the
cash flow of the business aren't hidden by other things going
on in the personal finances."

Burton looks at three things when choosing a business
bank-convenience, services and cost-and says you may find online
banking is more convenient than brick-and-mortar bank
locations.

Accounting software. There are a few different
accounting software programs available, so explore your options
before you invest your time and money. This investment will be
worth it down the road when you show up at your paid-by-the-hour
accountant or tax person's office with all your records neatly
in hand, or when you need to instantly figure out where your
finances are at this month. If you're looking into online
banking, says Burton, you'll want to match your accounting
system with that.

Hiring an accountant. As with finding an attorney,
you'll want to get some word-of-mouth recommendations and ask
many questions when you look for an accountant. "Work with an
accountant as early as possible," Burton recommends.
"Then you may choose the set of services you need to
supplement what you can do yourself." Burton also warns
there's a difference between CPAs and accountants-the former
can "provide pretty much anything you may need."
Accountants may be more limited in the services they provide.

Determining your startup financing needs. This is where
your financial planning comes into play. You've already
inventoried your assets. Now, are you short the money you need to
start your business? If so, what are your financing options?
Homebased businesses have a cheaper entry fee than traditional
office and retail spaces, so you can probably borrow money from
friends and family or (carefully!) use a credit card to fund your
new business. You can also try to shorten the gap between what you
have and what you need by cutting expenses. Doesn't your aunt
have a desk she's not using? Can you barter your services to a
designer for your new brochure? Get creative in your approach to
saving money.

Create a budget. Starting out with a budget is a
powerful way to immediately take control of your finances. After
all, would you rather control your cash flow or have your cash flow
control you? A good measure for your first budget is at least one
year. "This budget should be detailed and based upon sound
data, not just wishful thinking," says Burton. "Most new
businesses are overly optimistic about their revenue
projections-both from the point of view of how quickly the revenue
will start and the level of it. And they tend to underestimate
expenses. Many new businesses start with much less capital than
they'll need to make the business self-supporting."

Setting Up Your Office

Analyze your home to find the best space for your
office. Take a long, hard look at your home to determine all
the places you could put your home office: walk-in closet, extra
den or guestroom, space in the garage, enclosed porch. After
finding potential places, spend time in each at different times of
the day to determine if the noise factor and lighting is OK. Also,
do these areas have access to the type of outlets you need, and is
there enough space for your furniture and other equipment?
"When you decide where you want to set up your home office,
give yourself a month to try the space," says home office
expert Lisa Kanarek and author of Home Office Life. "If
it's not working for you, find another place."

Go ergonomic. There are a number of factors to consider
here, but one of the most important is giving up the dining room
table and kitchen chair and investing in a computer workstation and
office chair. "The money you save on furniture may wind up
being spent on visits to the doctor to cure back pain," says
Kanarek. Also invest in good lighting, a wrist pad, a headset if
you spend a lot of time on the phone, and other items that will
make working easier on your body.

Determine your technology needs. You probably already
have a home computer, and despite your assumptions, you really
don't need the newest, shiniest PC to run a business. (Unless,
perhaps, you are involved in graphics-intensive business.) A
computer, printer, file backup system, high-speed Internet access,
an office suite of software and voice-mail system are all crucial
investments. A multifunction unit (scanner/fax
machine/printer/copier) may also prove its worth. Be sure not to
skimp on your phone and voice-mail system. Your phone will be your
primary point of contact for your clients, and you need a
professional system to handle the call volume. Above all, get a
separate office line that won't be answered by your family or
held up by dial-up Internet access.

Prepare for visitors, if necessary. "Make sure that
any part of your home a client may encounter is clean and
organized," advises Kanarek. "First impressions are
important, especially when you work from home. Ideally, your home
office should be as far away from family gathering places as
possible to avoid interruptions." Kanarek adds that if you
have the space, a small conference table is a good addition to a
home office that has visitors.

Make your home office safe and secure. Now that your
business is a part of your home, safety and security are doubly
important. If you live alone, it may be a good idea not to have
visitors or to let people know you work at home alone. Invest in an
alarm system, and try to keep your office (and expensive equipment)
under wraps by not having an open office window at the front of
your home. As we mentioned previously, talk to your insurance agent
about the type of insurance you need. And always back up your
data-Kanarek suggests having two copies-and store it offsite.
Finally, check your office for safety hazards like loose cords,
precarious stacks of books and papers, and too many plugs in one
outlet.

Gear Up for Marketing

Create marketing materials. Your marketing materials
include any print material you'll use to contact customers,
including your business card, brochure, direct-marketing materials,
signs (if you're allowed to have them), press kit and labels,
if you have your own products. Fully commit to your business name
and logo before you begin printing and distributing any
materials-you don't want to waste money or confuse any
potential customers by changing your image midstream. Creating a
solid image in print solidifies your legitimacy as a new
business.

Build an online calling card. If you're starting an
online business, this is a big job. But if you have a regular
business-say, business support services-you still should create a
website. It's an inexpensive brochure people can access
anywhere. People can find you online, and contact you through the
real-world information you include. Also get used to marketing
online. Find newsgroups that pertain to your profession and begin
posting information (not ads). Those interested in your services
will find you through your signature, which should include your Web
site and e-mail address. Look for online directories that suit your
business, and consider creating an e-mail newsletter to keep
prospects abreast of your services.

Join networking organizations. Word-of-mouth marketing
is the cheapest and one of the most effective ways to get your
business in front of people. And the way you'll do that is
through networking. You can approach your friends, family,
neighbors and people you do business with. (Always have business
cards ready.) But some people find it easier to start with
networking organizations, like your local chamber of commerce,
trade associations and Business Networking International.